The Federal Ministry of Finance has dismissed claims that a significant portion of Nigeria’s federation revenue is being diverted or concealed, describing such interpretations of the latest Nigeria Development Update by the World Bank as misleading and inaccurate.
In a statement issued on Sunday, the Minister of State for Finance, Taiwo Oyedele, said recent media reports had misrepresented the World Bank’s findings, particularly suggestions that Federation Account earnings were subject to “hidden spending”.
He said the claims stemmed from a misunderstanding of the country’s fiscal framework and a misreading of the report’s analysis.
FAAC Deductions Not Missing Funds
The ministry clarified that deductions made by the Federation Account Allocation Committee (FAAC) were being wrongly described as waste or unaccounted funds.
According to the statement, these deductions cover legitimate fiscal obligations, including statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, and refunds to Ministries, Departments and Agencies (MDAs).
It added that transfers and interventions benefiting subnational governments were also part of the deductions and should not be misconstrued as leakages.
“It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages,” the minister said. “They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.”
Concerns Over Selective Data Use
The ministry also criticised what it described as the selective use of outdated data in some commentaries, noting that such analyses ignored recent reforms highlighted in the World Bank report.
Oyedele pointed to measures introduced in early 2026, including an executive order aimed at safeguarding the remittance of petroleum revenues, which he said were already addressing concerns around revenue deductions.
He added that the reforms were expected to enhance transparency and boost revenues available to all tiers of government by approximately 0.4 per cent of GDP annually.
Improving Economic Indicators
Highlighting the broader conclusions of the World Bank report, the ministry said Nigeria’s macroeconomic outlook was improving.
It noted that economic growth was becoming more broad-based, while inflation, though still high, was on a downward trend due to policy interventions.
The statement further said Nigeria’s external position had strengthened, citing improved foreign reserves and a current account surplus, alongside better debt indicators, including a decline in the debt-to-GDP ratio for the first time in over a decade.
Call for Responsible Reporting
The ministry stressed that the World Bank report did not suggest that Nigeria’s fiscal system was failing, but rather indicated that ongoing reforms were yielding results and should be sustained.
“The Federal Government remains committed to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth,” the statement said.
It urged media organisations and stakeholders to engage responsibly with fiscal data, warning that misinterpretation could undermine public confidence and disrupt ongoing reform efforts.
